Australia's biggest privately owned health insurer, Bupa, has blamed changes to the government's health rebate and insufficient premium rises for a drop in profit.
Softer economic conditions in Australia also pushed profits down, despite its customer base growing.
Accounts filed by the London-based Bupa showed its underlying profit for the Australian arm for the six months ending June 2013 was $196.7 million (£115.9 million).
This was 9 per cent lower than the previous corresponding period.
Despite this, revenue was up the equivalent of 11 per cent to $3.2 billion.
The insurer reported its first-half earnings early on Thursday. It said the Australian government's health rebate cut, which came into effect in July last year, had resulted in customers downgrading their cover or dropping it completely.
"Profit was down due to several factors, including lower-than-expected government-regulated premium increases, resulting in lower margins," it said.
"Customers also continued to downgrade cover in response to lower government tax rebates and softer economic conditions."
A Bupa spokesman was, however, unable to say how many customers had downgraded or at what cost it had come to the business.
According to consumer group Choice, health insurance premiums rose an average 5.6 per cent in May, taking Australians' premium contributions to twice that of Britons'.
Bupa said its Australian bottom line had also been affected by ongoing economic uncertainty and low levels of consumer confidence.
"Spain, Australia and the UK, the key countries in which we operate, will remain tough but we believe we can innovate to deliver for customers and grow our business," chief executive Stuart Fletcher said.
The company as a whole reported a 1 per cent profit rise, to $443.3 million.
Consumers Health Forum of Australia said it had not seen evidence of a large number of consumers changing their cover because of the rebate change.
"Private health insurance participation is at its highest level ever," chief executive Carol Bennett said. "It would defy the trend that about 47 per cent, or 11 million Australians, now have private health insurance."